Global food prices reach 18-month high

Global food prices rose to their highest level in 18 months in October. According to the United Nations’ Food and Agriculture Organization (FAO), this increase is primarily driven by rising prices for vegetable oils. The FAO Food Price Index averaged 127.4 points in October, a 2 percent rise from September and 5.5 percent higher than a year ago. Although the index remains more than 20 percent below its peak in March 2022, the rise highlights ongoing pressure on global food markets.

Sharp increase in global oil prices

Vegetable oil prices rose sharply in October, jumping 7.3 percent to reach their highest level in two years. Palm, soy, sunflower, and rapeseed oils became more expensive, mainly due to production concerns influenced by weather conditions and geopolitical tensions. In addition, prices for grains, including wheat and maize, saw increases as well. Wheat prices rose in response to unfavorable weather in the Northern Hemisphere and new pricing measures in Russia, while maize prices were pushed up by domestic demand and logistical challenges in Brazil.

Sugar and dairy prices follow suit

The FAO Sugar Price Index recorded a 2.6 percent increase, partially due to dry weather in Brazil, which affected supply levels. Additionally, more sugarcane was directed toward ethanol production, influenced by higher oil prices, which also impacted sugar prices. Dairy prices rose as well, mainly due to higher international prices for cheese and butter. In contrast, meat prices showed a decline, mainly due to lower pork prices driven by increased slaughter rates in Western Europe.

With these trends, pressure on global food prices is likely to persist. The FAO expects to release a more detailed analysis of global cereal markets later this month.

Fao.org

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